NEWS

Labs In Court:
A roundup of recent cases and enforcement actions involving the diagnostics industry

Quest to Pay $1.15 Million for Self-Disclosed CMP Violations

Case: Quest Diagnostics, Inc., New Jersey has agreed to fork over $1.151 million for a trio of Civil Monetary Penalties Law violations that it voluntarily self-disclosed to the OIG. The allegations involve:

  • Performance of services outside the scope of employment by Quest phlebotomists in Texas, Maryland, Ohio and New Jersey;
  • Failure to meet documentation requirements in connection with Quest’s donations of electronic health records software and information technology to clinical laboratory referral sources; and
  • Failure to collect timely second-year payments from physician clients as required in electronic health record donation agreements.

Significance: This is the second reported case of an OIG fine against Quest in 2017 for self-disclosed violations. In February, Quest agreed to pay $315,093 for allegedly paying kickbacks to a referral source in a case involving rent payments at above fair market value to a medical practice made by a Quest lab in New Jersey.

Medicare Exclusion for Not Documenting Response to Urine Drug Test Results

Case: A Michigan physician and pain management specialist agreed to a three-year Medicare and Medicaid exclusion for failing to meet medical necessity documentation standards. According to the OIG, the physician didn’t adequately document his response to results of urine drug screenings and discussions with patients who: 

  • Tested positive for illicit drugs and/or controlled substances;
  • Tested positive for non-controlled substances he didn’t prescribe; and/or
  • Tested negative for controlled substances he did prescribe.

Significance: This case serves as a reminder of two important morals on physician documentation of medical necessity of lab tests:

  • Proper documentation isn’t just a favor to help the lab get paid for ordered tests—it’s a core standard of health care quality that physicians must meet to participate in Medicare; and
  • To document medical necessity properly, physician must show not simply why they ordered the tests but how they actually used the test results to treat the patient.
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